中欧社会论坛 - China Europa ForumHow to Divide the Intergovernmental Administrative and Financial Powers?
Authors: Zhang Yongsheng
Published by Comparative Economic and Social Systems (bimonthly), 2008, No. 2
The worldwide trend of decentralisation involves both administrative and financial powers of government, namely expenditure responsibilities (administrative power) = own income + transfer income (financial power). The administrative and financial powers of each levels of government should be matched with each other. However, in reality, there is still a dispute on the two issues of “how to match the administrative and financial powers of the government” and “how to carry out the division of powers”. Obviously, if expenditure responsibilities of the central government are greater than the sum of governments’ own income and transfer income, it will result in insufficient government services; otherwise there will be the problem of a waste of resources and so forth. Most of the decentralisation worldwide is carried out in the form of decentralisation of expenditure responsibilities, whilst the local governments’ right to tax (or own share of income) did not increase, and the intergovernmental pattern of vertical fiscal imbalance has not shown signs of diminishing.